RAJESH BINDAL,J. - (1.) The grievance of the petitioner is that though it was entitled to benefit of modvat credit on purchase of tray casting used in the process of manufacture of tiny powder, in terms of circular No.276/110/96-TRU dated 2.12.1996, however, the same was wrongly denied to it.
(2.) The submission is that in October/November, 1997, the petitioner purchased tray casting as capital goods. In terms of the aforesaid circular, it was entitled to modvat credit as per Rule 57Q of the Central Excise Rules, 1944 (for short, 'the Rules'). The department issued show cause notice on 1.5.1998 proposing to deny the modvat credit. Vide order dated 30.9.1998, Assistant Commissioner, Central Excise, Ludhiana denied modvat credit to the petitioner. However, in appeal, the order passed by the Assistant Commissioner was set aside by the Commissioner (Appeals), Central Excise and Customs, Chandigarh on 23.8.1999, while relying upon an earlier decision of the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi (for short, 'the Tribunal') on the issue. The department preferred appeal before the Tribunal, which was allowed vide order dated 15.3.2000. The petitioner at that stage could not refer to the circular issued by the department entitling it to the benefit of modvat credit on purchase of tray casting. Immediately, rectification application was filed, which was rejected vide order dated 8.9.2000 by the Tribunal holding that there is no mistake apparent on record. He further submitted that even for the subsequent period, the Tribunal allowed modvat credit on tray casting purchased by the petitioner vide order dated 7.3.2001, while relying upon circular No.276/110/96-TRU dated 2.12.1996. Once the claim of the petitioner is squarely covered in terms of the circular issued by the department, the petitioner should not be denied the benefit thereof. Merely because he had not been able to cite the circular at the relevant time, when the appeal was heard, though it was the duty of the counsel appearing for the department to have produced the same, the petitioner could not be denied the benefit admissible to it. Rather, the department should not have preferred the appeal against the order passed by the first Appellate Authority once the claim of the petitioner was in consonance with the circular issued by the department.
(3.) On the other hand, learned counsel for the respondents did not dispute the fact that the petitioner is entitled to benefit of modvat credit in terms of circular No.276/110/96-TRU dated 2.12.1996, however, he submitted that the circular having not been brought to the notice of the Tribunal at the time of hearing of the appeal, the benefit was not admissible to the petitioner.;